The European Commission’s 16 December announcement to ease the 2035 CO₂ reduction targets marks a pivotal moment for Europe’s automotive sector. After more than a decade in which the industry understood that a zero-emission future was inevitable, Brussels has now chosen to step back. The new objective of a 90 per cent reduction instead of full elimination, combined with the absence of a firm phase-out date for combustion engines, not only introduces strategic ambiguity but also reopens the door for hybrids and even conventional engines beyond 2035. On paper, this may appear to be a victory for those defending the internal combustion engine. In practice, it is a far more complex and potentially misleading outcome. The required CO₂ compensation through green steel, biofuels and e-fuels remains technologically uncertain, economically fragile and likely to be scarce. What looks politically feasible today may prove industrially unrealistic tomorrow. This policy shift also comes at a time when China is accelerating its coordinated EV strategy, while Europe continues to struggle with fragmented decision making, slow execution and growing dependence on non-European technologies. The real question, therefore, is not only what this decision means today, but what long-term opportunities and risks it creates for Europe’s position in the global mobility landscape.
Despite the policy uncertainty at the EU level, the market tells a different story: electrification is advancing strongly on the ground. According to the latest European Market Monitor for Cars and Vans, battery electric vehicles (BEVs) accounted for 20 percent of all new passenger car registrations in October 2025, holding steady at this share compared with previous months and marking continued progress toward cleaner mobility. Year-to-date BEV market share has risen to 18 percent, up 4 percentage points from the same period in 2024.
Importantly, this growth is not limited to premium models. European OEMs such as Volkswagen and Renault have reported double-digit increases in EV sales thanks to the introduction of more affordable electric models, with studies showing these brands growing significantly year-on-year — in some cases by around 60 percent and even 80 percent respectively, driven by rising consumer demand for competitively priced BEVs.
Post time: Jan-10-2026